Bumble Shares Soar 26% Following Announcement of 30% Workforce Reduction Plans

Bumble experienced a significant surge in its stock prices, climbing over 26% on Wednesday. This spike followed the company’s announcement in a securities filing regarding substantial layoffs, which will affect around 240 employees, representing 30% of its workforce. The layoffs are expected to incur charges between $13 million and $18 million during the third and fourth quarters, with management projecting annual savings of $40 million as a result.

A representative from Bumble indicated that the decision to lay off employees was not taken lightly. In a statement to CNBC, the spokesperson emphasized that the company’s priority is to strengthen its core operations, enhance service for its users, and position themselves for future growth. These cuts are part of a broader reorganization aimed at optimizing their operational structure and aligning with strategic objectives.

The savings generated from these layoffs will be channeled into product and technology development. Bumble’s shares have seen a troubling decline since the company’s public debut in 2021, with its market value dropping from $7.7 billion to approximately $538 million as of the previous day’s close. Founder Whitney Wolfe Herd, who briefly stepped down as CEO at the start of 2024, has since returned to lead the company.

In conjunction with the layoffs, Bumble has revised its revenue forecasts for the current quarter, now estimating earnings to fall between $244 million and $249 million. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) are anticipated to be between $88 million and $93 million, an increase from earlier projections of $235 million to $243 million in revenue and $79 million to $84 million in adjusted EBITDA reported last month.